The China Review An Interdisciplinary Journal on Greater China Volume 15
Number 1
Spring 2015
New Insights on Hong Kong Real Estate Elite, Economic Development, and Political Conflicts in Postcolonial Hong Kong Stan Hok-wui Wong The Rise of “Anti-China” Sentiments in Hong Kong and the 2012 Legislative Council Elections Ngok Ma Party Models in a Hybrid Regime: Hong Kong 2007–2012 Mathew Y. H. Wong
Volume 15
Number 1
Spring 2015
Other Articles Interests and Political Participation in Urban China: The Case of Residents’ Committee Election Bing Guan and Yongshun Cai
An Interdisciplinary Journal on Greater China
Friend or Foe: India as Perceived by Beijing’s Foreign Policy Analysts in the 1950s Xiaoyuan Liu Securitization of the “China Threat” Discourse: A Poststructuralist Account Weiqing Song
State-of-the-Field Review The Evolution of Population Census Undertakings in China, 1953–2010 Xiaogang Wu and Guangye He Marriage Expenses in Rural China Quanbao Jiang, Yanping Zhang, and Jesús J. Sánchez-Barricarte
Featured in This Issue
Book Reviews Vol. 15, No. 1, Spring 2015
Available online via ProQuest Asia Business & Reference Project MUSE at http://muse.jhu.edu/journals/china_review/ JSTOR at http://www.jstor.org/action/showPublication?journalCode=chinareview
New Insights on Hong Kong
The China Review An Interdisciplinary Journal on Greater China Volume 15
Number 1
Spring 2015
New Insights on Hong Kong Real Estate Elite, Economic Development, and Political Conflicts in Postcolonial Hong Kong Stan Hok-wui Wong The Rise of “Anti-China” Sentiments in Hong Kong and the 2012 Legislative Council Elections Ngok Ma Party Models in a Hybrid Regime: Hong Kong 2007–2012 Mathew Y. H. Wong
Volume 15
Number 1
Spring 2015
Other Articles Interests and Political Participation in Urban China: The Case of Residents’ Committee Election Bing Guan and Yongshun Cai
An Interdisciplinary Journal on Greater China
Friend or Foe: India as Perceived by Beijing’s Foreign Policy Analysts in the 1950s Xiaoyuan Liu Securitization of the “China Threat” Discourse: A Poststructuralist Account Weiqing Song
State-of-the-Field Review The Evolution of Population Census Undertakings in China, 1953–2010 Xiaogang Wu and Guangye He Marriage Expenses in Rural China Quanbao Jiang, Yanping Zhang, and Jesús J. Sánchez-Barricarte
Featured in This Issue
Book Reviews Vol. 15, No. 1, Spring 2015
Available online via ProQuest Asia Business & Reference Project MUSE at http://muse.jhu.edu/journals/china_review/ JSTOR at http://www.jstor.org/action/showPublication?journalCode=chinareview
New Insights on Hong Kong
The China Review An Interdisciplinary Journal on Greater China Volume 15, Number 1 (Spring 2015)
New Insights on Hong Kong
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Real Estate Elite, Economic Development, and Political Conflicts in Postcolonial Hong Kong Stan Hok-wui Wong
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39 The Rise of “Anti-China” Sentiments in Hong Kong and the 2012 Legislative Council Elections Ngok Ma
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67 Party Models in a Hybrid Regime: Hong Kong 2007–2012 Mathew Y. H. Wong
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Other Articles
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95 Interests and Political Participation in Urban China: The Case of Residents’ Committee Election Bing Guan and Yongshun Cai
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117 Friend or Foe: India as Perceived by Beijing’s Foreign Policy Analysts in the 1950s Xiaoyuan Liu 145 Securitization of the “China Threat” Discourse: A Poststructuralist Account Weiqing Song State-of-the-Field Reviews 171 The Evolution of Population Census Undertakings in China, 1953–2010 Xiaogang Wu and Guangye He
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Contents
207 Marriage Expenses in Rural China Quanbao Jiang, Yanping Zhang, and Jesús J. Sánchez-Barricarte Book Reviews 237 The Middle Class in Neoliberal China: Governing Risk, Life-Building, and Themed Spaces. By Hai Ren Zhou Yongming 240 China’s Legal System. By Pitman Potter Yudu Li, Hong Lu, and Bin Liang
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245 Social Protest and Contentious Authoritarianism in China. By Xi Chen Peng Hu
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248 Hewei Zhongguo: Jiangyu, minzu, wenhua yu lishi (What Is China: Territory, Ethnicity, Culture, and History). By Ge Zhaoguang Sheng Mao
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251 The Government Next Door: Neighbourhood Politics in Urban China. By Luigi Tomba Xuan Dong
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254 Civilization, Nation and Modernity in East Asia. By Chih-Yu Shih Daniel Westlake
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257 The New Kings of Crude: China, India, and The Global Struggle for Oil in Sudan and South Sudan. By Luke Patey Okey Marcellus Ikeanyibe
The China Review, Vol. 15, No. 1 (Spring 2015), 1–38
Real Estate Elite, Economic Development, and Political Conflicts in Postcolonial Hong Kong Stan Hok-wui Wong
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Abstract
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Business interests have been overrepresented in key political institutions of postcolonial Hong Kong. An increasingly popular view holds that business interests, spearheaded by the real estate elite, have become politically powerful enough as to capture the government. In this article, I critically examine this thesis. I find that a number of high-profile mega projects considered manifestations of the so-called real estate hegemony actually met resistance from within the real estate elite, while cases where the real estate elite jointly promoted their sector interests have yielded distributive benefits to the low-income class. My findings qualify the “real estate hegemony” thesis by unraveling (1) collective action problems confronted by the special interest group and (2) positive externalities generated from special interest politics, and their political consequences.
Stan Hok-wui WONG is an assistant professor in the Department of Government and Public Administration at the Chinese University of Hong Kong. His research interests include authoritarian politics and democratization. His articles have appeared in journals such as Electoral Studies and Journal of Contemporary Asia.
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1. Introduction
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Soon after the 2012 Hong Kong chief executive election, Li Ka-shing, considered the richest man in town, was asked to comment on the election result. With his usual measured composure, he answered, “The Hong Kong Special Administrative Region (HKSAR) government does not depend on one individual. … The core values of Hong Kong lie in freedom and the rule of law.” To Hong Kong people, Li’s remark may have sounded a bit ironic. If freedom means having the ability to make choices, many in Hong Kong feel that their freedom is severely constrained. Politically, Hong Kong people cannot elect their political leaders through universal suffrage. Economically, a fair number of markets are dominated by big businesses. Take Li Ka-shing’s business empire as an example. It has penetrated numerous economic sectors, ranging from telecommunications, container ports, retail, housing, and public utilities to the media. The economic power of the business elite is further complicated by its members’ political privileges. Since 1997, major Hong Kong business magnates such as Li Ka-shing have managed to sit on the highly exclusive Election Committee, a constitutional body whose sole function is to elect Hong Kong’s chief executive. When the moneymakers have also become the kingmakers, it is difficult to convince the public that the government can remain neutral. In fact, no administration in postcolonial Hong Kong has been able to successfully dispel the widespread suspicion of “collusion between government and business” ( 官商勾結 guanshang goujie). Many government policies have been perceived to be heavily skewed in favor of the business sector, especially the real estate elite such as Li Ka-shing. The term “real estate hegemony” ( 地產霸權 dichan baquan) has been popularized by a book with the same Chinese title, which documents the dominant position of the real estate elite in various markets.1 Meanwhile, a series of high-profile scandals have broken out,2 reinforcing the public’s impression that the real estate elite has untold, if not also undue, influence over the postcolonial government. Not surprisingly, the real estate elite has become the target of numerous social and political protests in recent years. Given the real estate elite’s economic dominance and perceived political significance, what role it plays in Hong Kong’s postcolonial political economy demands a systematic study. In this article, I critically
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examine the “real estate hegemony” thesis by investigating how members of the real estate elite achieved their political ascendancy, where their economic interests lie, how they have benefited from the postcolonial government’s policies, and the economic and political consequences. Two important observations, which have previously been underemphasized in studies of Hong Kong’s state–business alliance, stand out from my analysis. The first is the internal strife within the real estate elite; its members often compete against each other, reducing their cohesiveness and ability to pursue their collective special interests. The second is the distributive effects of this special interest politics. Contrary to the popular account that pits the real estate elite against the rest of the population, or property owners against the propertyless masses, the economic dependence on land-related economic activities has actually benefited asset-poor, low-skilled workers, thanks to the expansion of the service sector. There is a wealth of literature in the field of political economy studies examining the effects of the economic interests of political coalitions. Rogowski studies how conflicts between different classes or factors (i.e., land, capital, and labor) structure the direction of a country’s trade policy.3 Gourevitch argues that coalitions of various economic sectors affect governments’ responses to economic crises.4 Hiscox shows that factor mobility across industries is a strong predictor for the formation of political coalitions.5 Boix argues that democratization is less likely if members of the ruling elite are the owners of fixed capital.6 Drawing on the experience of Malaysia and Indonesia during the Asian Financial Crisis, Pepinsky contends that authoritarian regimes that base their support on a fixed-capital ruling coalition are able to exercise resolute capital controls in times of economic crisis, thereby lowering the risk of regime collapse.7 To seek political influence, however, business firms do not always coalesce into a factor- or sector-based coalition. In fact, some argue that firms may lobby for regulation to deter new market entrants.8 Faccio also finds that individual firms that run into trouble are more likely to seek government bailouts. Firm performance also varies with the degree of political connection.9 Fan, Wong, and Zhang find that the performance of politically connected firms is worse than that of their unconnected counterparts.10 On the other hand, Ferguson and Voth show that German firms connected to the Nazi movement outperformed those without such connections.11
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The current study engages the extant literature in two important ways. First, the case of Hong Kong shows that political coalitions based on similar economic interests are not necessarily cohesive. Sometimes precisely because coalition members come from the same industrial sector, internal strife runs deep. Second, while the extant studies predominantly focus on the direct effects of political connections (either on the connected firms or on immediate government policies), this study shows that the externalities resulting from state–business relations may have social and political consequences that are no less important than the direct effects themselves. The rest of this article is organized into six sections. In Section II, I present an overview of the various theoretical accounts of Hong Kong’s economic dependence on the real estate sector. In Section III, I discuss the political ascendancy of the real estate elite. Section IV is an analysis of their economic interests, while Section V examines how their economic interests converged and ran into conflict after 1997. I examine the political and economic consequences of the growing dependence on land-related economic activities in Section VI. I discuss the political implications of Hong Kong’s land-dependent economy in the final section.
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2. Facts and Theories of Hong Kong’s Political Economy
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Hong Kong’s economy is developed and globally integrated. As of 2012, according to World Bank data, its GDP per capita based on purchasing power parity has reached US$44,770, surpassing countries such as Germany and Switzerland. Between 1997 and 2012, the economy grew at 3.57 percent annually on average. Remarkably, trade accounted for 397.9 percent of the city’s GDP in 2012. Despite its high trade-to-GDP ratio, much of the trade involves re-exports. In fact, the manufacturing sector of Hong Kong is exceptionally small by world standards, as may be seen from Figure 1.
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Figure 1: Manufacturing as a Share of Metro Outputs by City
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Part of the reason why Hong Kong has an insignificant manufacturing sector is that land prices are high. One common indicator of property values is the price-to-income ratio, which measures the total price of a home relative to the owner’s annual income. The index for Hong Kong in the third quarter of 2013 was 14.6,12 far higher than in cities such as Tokyo and Singapore.13 At such high land prices, many traditional industrial activities are unprofitable. Since the 1980s, manufacturers have relocated their factories to the Pearl River Delta en masse, hollowing out the city’s manufacturing sector. Not everyone is hurt by high land prices, however. The government is arguably one of the major beneficiaries, because, by law, it is the ultimate owner of all property in Hong Kong.14 It sells on a regular basis to land developers the temporary right to occupy land in the form of leaseholds. Land premiums, which are the income generated from the sales of such rights, have become an important source of government revenue since at least the 1980s (see Table 1).
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Table 1: Land Sales Incomes and Government Budget Land sales incomes
1980/1981
107.70
1981/1982
96.77
Total government revenue 302.90
Total government expenditure 235.94
343.13
Budget surplus
Land sales incomes/ total government revenue (%) 35.56
66.97
277.78
65.35
28.20 16.23
50.48
310.98
345.98
1983/1984
22.67
304.00
333.93
–29.93
7.46
1984/1985
42.67
385.25
398.82
–13.57
11.08
1985/1986
44.81
436.95
434.44
2.51
10.26
1986/1987
30.86
486.02
427.02
59.00
6.35
1987/1988
39.74
608.75
483.75
125.00
6.53
1988/1989
67.58
726.58
537.96
188.62
1989/1990
76.69
824.29
713.66
110.63
9.30
1990/1991
42.43
895.23
855.56
39.67
4.74
1991/1992
94.86
1,146.99
921.91
225.08
8.27
1992/1993
92.24
1,353.11
1,133.32
219.79
6.82
1993/1994
193.76
1,666.02
1,474.38
191.64
11.63
1994/1995
205.86
1,749.98
1,641.55
108.43
11.76
1995/1996
228.96
1,800.45
1,831.58
–31.13
12.72
1996/1997
295.08
2,083.58
1,826.80
256.78
14.16
1997/1998
659.31
2,812.26
1,943.60
868.66
23.44
1998/1999
256.86
2,161.15
2,393.56
–232.41
11.89
1999/2000
391.11
2,329.95
2,230.43
99.52
16.79
2000/2001
321.83
2,250.60
2,328.93
–78.33
14.30
2001/2002
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–35.00
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1,755.59
2,388.90
–633.31
2002/2003
121.90
1,774.89
2,391.77
–616.88
6.87
2003/2004
65.49
2,073.38
2,474.66
–401.28
3.16
2004/2005
594.28
2,635.91
2,422.35
213.56
22.55
2005/2006
309.77
2,470.35
2,330.71
139.64
12.54
2006/2007
414.84
2,880.14
2,294.13
586.01
14.40
2007/2008
663.77
3,584.65
2,348.15
1,236.50
18.52
2008/2009
231.55
3,165.62
3,124.12
41.50
7.31
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106.83
2009/2010
418.77
3,184.42
2,890.25
294.17
13.15
2010/2011
683.42
3,764.81
3,013.60
751.21
18.15
2011/2012
884.66
4,377.23
3,640.37
736.86
20.21
Source: Hong Kong Yearbook, various issues. Note: “Land sales incomes” include land premiums and other revenues generated from land transactions. The unit of observation, unless shown otherwise, is HK$100 million.
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Another major beneficiary of high land prices is the real estate elite. By the term “real estate elite,” I refer to a coterie of ethnic Chinese business magnates who may have business interests in multiple industries but who have derived their exorbitant wealth mainly in the postwar era from Hong Kong’s real estate, as evidenced by their control of listed companies specializing in land development. This definition excludes some successful businessmen such as Shaw Run Run and Tin Ka Ping, who hold no controlling stake in any land development company. Note that I define the elite neither by their birthplace nor by nationality, as some of them, like the majority of the city’s population, were originally from mainland China or elsewhere, and have subsequently acquired a foreign nationality. For a list of real estate companies listed on the Hong Kong Stock Exchange, see Appendix A. Over the past decades, as will be discussed in the following section, land development has earned these elite businessmen enormous profits, allowing their business conglomerates to corner different markets through mergers and acquisitions. Among the richest members of the business elite in Hong Kong, it is difficult to find one who is not a land developer. As may be seen from Appendix B, almost all the top ten Chinese business families in Hong Kong control a listed land development company. Their companies constituted, in April 1997, more than 40 percent of the total market capitalization of the Hong Kong Stock Exchange. Land development also brings business to other economic sectors such as construction and banking. Take banking as an example. Property-related lending (including mortgage loans and credit for construction and property investment) accounts for 46 percent of total domestic lending.15 The outstanding values of mortgage loans stood at HK$900 billion at the end of 2013, or 40 percent of the city’s annual GDP. In sum, the real estate sector is arguably the most important pillar of Hong Kong’s economy. It facilitates the economic activities of both the public and private sectors. It supports the livelihoods of countless families. Even if one is not employed either directly or indirectly in this sector, one may still spend one’s whole life working to pay off one’s home mor-tgage. Not surprisingly, some identify Hong Kong as a “property state.”16 What accounts for Hong Kong’s economic dependence on the real estate sector? One popular view holds that the city has simply followed the “natural” course of economic development under free market or
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laissez-faire conditions.17 Economists have long observed that an economy may undergo structural changes as it develops. A typical development trajectory is to move from agriculture to manufacturing and then to services.18 As many services industries are nontradable, their development drives up the demand for land. This explains why urban land prices are generally higher than rural ones. This view, however, is not entirely satisfactory for two reasons. First, Hong Kong’s manufacturing sector is exceptionally small, even by the standards of world cities. As may be seen from Figure 1, the share of manufacturing in Hong Kong’s GDP is the lowest among the top 25 global cities. Its share is even lower than that of Washington, D.C., where the per capita GDP is 47 percent higher than that of Hong Kong.19 As all these cities have vibrant services industries, what makes Hong Kong’s manufacturing sector so dismally insignificant remains puzzling.20 Second, this view is inconsistent with historical facts. Although Hong Kong has been touted by some, Milton Friedman included, as an exemplar of a free-market economy, empirical studies show that nonmarket forces were very much alive in all factor markets, especially the land market, long before the retrocession,21 deviating from the government’s professed laissez-faire doctrines.22 The postcolonial government also seems not to be a faithful disciple of laissez-faire. In particular, Tung Chee-hwa, the first chief executive, was an avid supporter of mega projects, including Cyberport, the West Kowloon Cultural Development project, and the ambitious plan to build 85,000 housing units per year. These overt attempts to intervene in the economy are inconsistent with laissez-faire doctrines. In sum, it is problematic to say that Hong Kong’s current economic structure is a product of nothing but the invisible hand of the market. Another popular account is that the Hong Kong government has its own vested interests in maintaining a land-dependent economy because it is also a major beneficiary of a booming real estate sector.23 For example, in recent years, nearly 20 percent of Hong Kong’s total government revenue has come from land sales (Table 1). With this lucrative source of income, the argument goes, the government is able to keep taxes low on other economic activities and to fund various public services. This explanation is not without its own problems. First, since the early 1980s, all land premiums have been put in the Capital Works Reserve Fund, which is disbursed exclusively for one-off capital projects.
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In other words, major land sales revenues are not used for paying recurrent operating expenditures, including education and social welfare, which are funded entirely by other streams of tax revenue. Second, as may be seen from Table 1, the Hong Kong government has achieved an enormous budget surplus for most years in the past several decades. Taking the fiscal year 2010 –2011 as an example, the total government revenue and the total government expenditure stood at HK$376 billion and HK$301 billion, respectively. Even if the government in that year had not obtained any land premiums, which amounted to HK$68 billion, it would still have achieved a balanced budget. This calls into question whether land sales are vital for the provision of basic government functions.24 Finally, this explanation fails to articulate the political motives that lie behind the scenes. It assumes that the Hong Kong government is a benevolent entity, with an encompassing interest in the overall well-being of the population. As a result, it aggressively promotes the real estate sector, with a view to recycling the immense land profits back into community development. This benign and apolitical view of the government has been losing its audience since the retrocession. For one thing, as many point out, the postcolonial political system is imbued with structural biases in favor of the business elite.25 Business interests have been overrepresented in the functional constituencies of the legislature26 and the Election Committee for the chief executive.27 Wong presents empirical evidence, showing that firms with directors or major shareholders sitting on the Election Committee outperformed those without.28 Suffice it to say, fewer and fewer people in Hong Kong now believe that the government is able to make policies independently of the influence of the business elite. Against this background, there have emerged more studies exploring business influences in Hong Kong’s political process. Using network analyses, Ho and colleagues identify a “power elite,” overrepresented by big business, and dominating various public institutions such as legislature, government agencies, and social organizations.29 Lui and Chiu argue that the political configuration of business interests in post-1997 Hong Kong has experienced a process of “de-centering,” which has led to a governing crisis.30 Fong points out that the governing coalition of the HKSAR government is narrowly based in the business sector, and hence handicaps the government from meeting the rising demands of society.31 Although these studies do not explicitly use the term “state
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capture,” they all maintain that business influences figure prominently in Hong Kong’s political process. A view that has gained increasing currency in public discourse is the “real estate hegemony” thesis.32 According to this view, economic interests, spearheaded by the real estate elite, have become so economically and politically powerful in the postcolonial period that they have dominated the government’s decision-making processes. As such, government policies have been skewed heavily toward their special interests. The state-capture thesis is more appealing than previous accounts because it brings politics back into the equation. It links economic outcomes to the business interests rooted in postcolonial political institutions. In particular, it treats the real estate elite as a powerful lobby, veto player, or ruling class pursuing its group interests through government policies at the expense of the rest of the population. This view, however, is problematic in two important respects. First, it ignores the internal conflicts within the real estate elite; as I will explain in the following analysis, on a number of occasions business competition has prevented the real estate elite from advancing group interests. Second, as will be explained in this study, this view overlooks the broader social and political implications resulting from the so-called real estate hegemony.
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3. Political Ascendancy of the Real Estate Elite
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In the 1980s, Hong Kong endured a decade of political turbulence. In 1982, Margaret Thatcher paid an historic visit to Beijing to discuss with Deng Xiaoping the future of Hong Kong. In 1984, the negotiation between Beijing and London came to a fruitful end. The British government agreed, although reluctantly, to hand over Hong Kong to China in 1997.33 Hong Kong people were not consulted at all during the entire negotiation process. Gripped by the fear of impending Communist rule, many used what was perhaps their last resort in defending their individual political and economic interests: exit. The signing of the SinoBritish Joint Declaration set off a wave of emigration from Hong Kong. The number of emigrants reached new heights after 1989, following Beijing’s brutal crackdown on a peaceful prodemocracy student movement. Presumably, those who had the financial means to acquire a foreign passport also tended to be the most economically productive. Price Waterhouse warned that the brain drain, followed by the massive wave of
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emi-gration, would ultimately cut Hong Kong’s growth rate by 45 percent prior to 1997.34 The negative developments in Hong Kong deeply worried Beijing. With the traumatic experience of the June Fourth Incident engraved in the city’s collective memory, Beijing found itself in a precarious political position. It desperately needed a political partner, acceptable to Hong Kong society at large and to serve as a bridge to the chasm between Beijing and the Hong Kong people. Against this complicated historical background arose the real estate elite of Hong Kong. There are multiple reasons why Beijing chose these Chinese magnates as its co-optation target. First, as Hong Kong residents (though not necessarily Hong Kong–born), they were more likely to be accepted by Hong Kong society, rather than someone sent from mainland China. Second, these business tycoons were easier for Beijing to control because of their growing economic dependence on the mainland. Third, because their business was the central pillar of the city’s economy, their political support for Beijing yielded the best “demonstration effect” for other runaway capitalists.35 Finally, big business shared with Beijing a common enemy: Hong Kong’s rising prodemocracy force.36 This force developed quickly after the June Fourth Incident, as Hong Kong people found it important to build democratic institutions against the impending imposition of a Chinese authoritarian state after 1997. From the business tycoons’ perspective, democratization ran against their interests, because it would lead to stronger labor unions and more taxation.37 These factors forged an “unholy alliance” between Hong Kong’s real estate elite and Communist Beijing. In 1990, while the PRC government still suffered from international isolation because of the June Fourth Incident, various Hong Kong magnates such as Li Ka-shing and Kwok Tak-seng openly stated their confidence about Hong Kong’s future and pledged to continue to invest in the city’s economy.38 To reward its political supporters, Beijing appointed members of the real estate elite to key political positions such as those in the Chinese People’s Political Consultative Conference. In addition, almost all real estate magnates were invited to sit on the Preparatory Committee for the HKSAR, which was responsible for establishing the 400 -member Selection Committee for the first government of the HKSAR. Not surprisingly, these members ended up nominating themselves into the Selection Committee, which empowered them to hand-pick Hong Kong’s first chief
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executive.39 The one who ended up being selected, Tung Chee-hwa, was also a business tycoon.
4. Economic Interests of the Real Estate Elite
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Most members of the real estate elite earned their initial wealth prior to the 1970s in industries other than real estate. For instance, Hysan Lee, founder of the Hysan Development Company, first made his fortune in the opium trade back in the early twentieth century. Chen Din Hwa, head of the Nan Fung Group, was a leading textile manufacturer in the 1950s. Lim Por-yen established the Lai Sun Group, a giant in the garment industry. The business empire of Li Ka-shing began with a small factory producing plastic flowers back in the 1950s. Despite their diverse industrial backgrounds, these businesspeople were able to turn themselves into present-day tycoons by making the same investment move—land acquisition—albeit at different points in time. Quite notably, Hong Kong experienced two waves of massive retreat of British investment in the postwar era.40 The first occurred in the late 1960s, when the Cultural Revolution stimulated anticolonial insurgencies in Hong Kong. The second occurred around the time of the Sino-British negotiation over Hong Kong’s sovereignty, as detailed in the foregoing discussion. In each market downturn, the Chinese economic elite managed to expand their business empires by acquiring assets sold by runaway British or local capitalists at a reduced price. Real estate owners make a profit by selling and leasing land to other people who use it for their economic production or consumption. Presumably, real estate owners are able to charge more from those who have an inelastic demand for land. For example, compared with manufacturing, the retail sector depends significantly more on location-specific advantages. For this reason, the latter has a much weaker bargaining power vis-à-vis the land owners. This explains the observed business patterns of the real estate elite in Hong Kong. They have heavily engaged in the development of commercial buildings, shopping arcades, and private residential housing estates, as the consumption of these properties exhibits low price elasticity.
5. Conflicts and Cooperation among the Real Estate Elite Despite or because of their similar economic interests, the members of the real estate elite are at times in competition with each other when
Real Estate Elite, Economic Development, and Political Conflicts
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pursuing their individual interests. One salient point of cleavage within the real estate elite is firm size. It is said that land administration policies are biased in favor of large land developers. Here I consider two examples. A. Conflicts between Large and Small Land Developers a. Leasehold System
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When the government sells the leasehold of an estate to a buyer, the sale consists of two parts: (1) the land premium that the buyer has to pay up front and (2) the ground rent paid each year until the lease expires. The law stipulates that a lessee only needs to pay three percent of the adjustable rateable value of the property as annual ground rent, which implies that 97 percent of the property value goes to the land premium.41 This“high premiums, low rents” leasehold system favors large developers, who are able to afford the exorbitant land premiums. b. Application List System
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Prior to 1999, scheduled land sales through public auctions were one of the major land sale mechanisms.42 Between 1999 and 2013, the government introduced a new system known as the “application list system,” under which the government published a list of sites available for sale each year. Land developers could make a private offer to the government once they identified a desired site. If the private offer met the government’s undisclosed reserve price for the site, a public auction of the site would be arranged on condition that the applicant paid a deposit at a certain fraction of the government’s undisclosed reserve price. This system, therefore, allowed land developers to take the initiative in controlling the supply of land.43 The application list system turned out to disadvantage small land developers. Because large developers had a significant land bank, they were not eager to trigger more land sales through this system, as land shortages permitted them to mark up the prices of their existing properties.44 Small land developers, who had an incentive to acquire more land through the system, had to bear a high transaction cost, as the system required them to pay a sizable deposit up front. More importantly, even when they were able to trigger a public auction of a desired site, there was no guarantee that they would eventually win the site. In fact, the act of triggering the public auction revealed their private valuation of the
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site to large developers who were otherwise uninterested. As a result, this system has raised the bar for small land developers in acquiring land. Under the application list system, only a small number of sites were successfully sold.45 Aware of the problem of decreasing land supply, the government has gradually increased the use of public tenders in land sales, reclaiming the initiative in controlling land supply (see Table 2). In 2013, it abolished the application list system. Table 2: Land Sales Arrangements in Postcolonial Hong Kong Auction
Application list
1998/1999
11
2
N/A
1999/2000
7
11
2000/2001
9
12
2001/2002
0
10
2004/2005
5
2005/2006
6 1
Th
2012/2013
hin
2011/2012
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2010/2011
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2009/2010
2013/2014
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4
6
2
0
0
0
6
0
3 9
0
8
2
0
1
6
0
4
6
4
7
25
9
5
26
0
2
29
0
N/A
Un
2008/2009
1
0
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2007/2008
6
10
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2006/2007
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10
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2003/2004
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2002/2003
s
Tender
Pre
Year
Sources: Lands Department and the Development Bureau.
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B. Conflicts between Large Developers The conflicts among the real estate elite are not confined only to that which exists between large and small developers. In what follows, I will discuss several examples in which government policies or political developments actually brought major land developers into conflict. In particular, some examples are the mega projects widely perceived to be manifestations of the undue influence of the real estate elite on government policies.46 a. The Cyberport Project
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In 1999, at the height of the dot-com bubble, the government took the idea from Richard Li, son of Li Ka-shing, to develop Cyberport, which was intended to become the Hong Kong version of Silicon Valley.47 Richard Li’s company was later chosen as the developer of Cyberport without going through a process of competitive tendering. This move was heavily criticized by the general public as an example of “collusion between government and business.”48 These criticisms intensified after the media discovered that Richard Li could potentially pocket a $35-billion profit from building residential properties in Cyberport, reinforcing the public impression that the technology park was a real estate project in disguise.49 The government responded to critics by emphasizing that, as an IT project, 50 Cyberport needed to bypass timeconsuming competitive tendering.51 In addition, the government argued that Richard Li was chosen because of his ability to attract multinational IT firms.52 The government’s response not only failed to suppress public outcries, but also infuriated other real estate entrepreneurs. In an unprecedented move, nine major real estate developers issued a joint letter to the government, criticizing the government for setting a bad precedent.53 To allay their anger, the government pledged to invite interested developers to participate in other residential developments. This pledge, however, was interpreted as a “secret deal” signed between the government and developers.54 As the dot-com bubble burst, the technological aspects of the project evaporated, leaving the site converted into yet another luxurious apartment complex.
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b. The West Kowloon Cultural Development Project
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The core concept of this project was to create a cultural area to “cultivate Hong Kong’s image as the Asian centre of arts and culture, and of entertaining and sporting events.”55 The government again invited big developers to take a leading role in this project in the form of a public–private partnership, under which the developers were responsible for financing the construction and operation of the cultural area in exchange for the right to build residential and commercial properties on the site.56 Because the government allowed the developers to use almost 70 percent of the floor space of this cultural area for developing their own properties, the project aroused a public outcry and widespread skepticism over its true purpose. Ironically, the project was also severely criticized by land developers. This is because the government adopted a single-consortium development mode, in which the development of the entire site would be contracted out to a single developer. Stanley Ho, a business tycoon who chaired the Real Estate Developers Association of Hong Kong, openly urged the government to change the West Kowloon Cultural Development Project plan, so that more real estate tycoons could get on the gravy train.57 Several months later, the government announced the abandonment of the single-consortium development mode. Moreover, it would allow the successful bidder to develop only half of the residential and commercial area (35 percent of the total floor space), while the rest was further allocated by competitive tendering.58 This move was perceived as a way to avoid accusations of “collusion between government and business.” However, the new requirement significantly reduced the profits of the successful bidder.59 After two developers who had expressed initial interest withdrew their bids, the government announced in 2006 indefinite suspension of the project. c. The Hong Kong–Zhuhai–Macau Bridge Project Since the early 1980s, Gordon Wu, the chairman of Hopewell Holdings, had actively promoted the idea of constructing a mega bridge (the Hong Kong–Zhuhai–Macau Bridge) linking Hong Kong with the west banks of the Pearl River.60 The bridge was intended to further embed Hong Kong in the economic system of the Pearl River Delta. While the
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Chinese authorities showed enthusiasm, the former colonial government remained uninterested. After the retrocession, the project continued to meet resistance from, ironically, within the real estate elite. Canning Fok, the managing director of Hutchison Whampoa, a business conglomerate spanning a variety of sectors such as retail, energy, properties, and ports, openly stated that, while he welcomed the project, he opposed the fact that the government had subsidized the project by granting Wu a nearby site for developing a new container terminal at zero land premium.61 Fok also argued that a new container terminal was unnecessary, as the existing terminals owned by his own company would not be saturated until 2016. He counterproposed an alternative railway system to link its container terminals to the mainland.62 Despite Hutchison Whampoa’s opposition, Wu saw his lobbying effort pay off in 2002, as then Chinese premier Zhu Rongji signaled his support for the bridge project.63 d. 2012 Chief Executive Election
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The most dramatic power struggle within the economic elite in postcolonial Hong Kong manifested in the 2012 chief executive election. Henry Tang Ying-yen was considered the preferred candidate of major land developers, as he received nominations from Li Ka-shing, Thomas and Raymond Kwok of Sun Hung Kai Properties, Lee Shau-kee of Henderson Land Development, Robert Ng of Sino Group, and Gordon Wu. However, Tang was eventually defeated by Leung Chun-ying, a candidate perceived as hostile to these developers’ interests.64 It is important to note that Leung was also backed by some less prominent members of the real estate elite, including Ronnie Chan of Hang Lung Group and Vincent Lo of Shui On Group.65 As a result, some observers contend that the 2012 chief executive election marked a showdown between first- and second-tier land developers.66 C. Cooperation among the Real Estate Elite Admittedly, there have been times when the interests of various factions within the real estate elite converged. When their sector is in peril, they have been able to make a concerted effort to articulate their special group interests. I supply two examples below to illustrate their collective actions to influence the postcolonial government’s housing policies.
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a. Decreasing Supply of Real Estate
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Soon after the retrocession, Hong Kong was struck by the Asian Financial Crisis, which punctured the housing bubble developed in the previous two years. As housing prices plunged drastically, many found their apartments worth less than their mortgages (resulting in “negative equities”). Bank foreclosures skyrocketed, while private consumption shrank. As unemployment soared, the economy fell into a downward spiral. The newly established HKSAR government looked anxiously for a way out of these troubles. Immediately after the sovereignty handover, the first HKSAR government announced three ambitious housing development goals: (1) to build 85,000 housing units per year, (2) to reach 70 percent home ownership rate within 10 years, and (3) to reduce the average waiting time for public rental housing from seven to three years.67 These programs, which benefited the less affluent by increasing the overall housing supply, were uniformly criticized by the real estate elite.68 As the economic crisis worsened, the government privately discontinued these programs for fear that raising the housing supply would further devastate the ailing housing markets. In addition, in 2002, the sixth year of the housing doldrums, the government announced the indefinite termination of an important subsidized housing scheme (the Home Ownership Scheme). The upshot of this policy change was that hundreds of thousands of eligible owners of these public flats were pushed into the private housing market. The government also replaced the traditional method of selling land by auction with the aforementioned application list system. As discussed in the previous section, this system empowered the real estate elite to control land supply, leading to a continuous decline in the housing supply. Figure 2 presents the statistics of annual flat production, showing a clear downward trend after 1997.69 b. Increasing Demand for Real Estate In October 2001, members of the real estate elite attempted to issue a joint letter to the chief executive, urging him to accelerate Hong Kong’s integration with the mainland as a way to revive the economy.70 It is worth noting that the real estate elite had originally opposed such integration, for fear that Hong Kong residents would be encouraged to invest
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Figure 2.2: Annual FlatFlat Production in HonginKong Figure Annual Production Hong Kong
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Sources: Hong Kong Annual Digest of HKSAR Statistics, HKSAR RatingDepartment, and Evaluation Department, Sources: Hong Kong Annual Digest of Statistics, Rating and Evaluation Hong Kong Housing Authority. Hong Kong Housing Authority.
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Note: The for for private housing is the area between dashed and lines.and solid lines. Note: Thefigure figure private housing is the areathe between the solid dashed
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in mainland property markets.71 But as Hong Kong’s economy faltered, their preference changed; closer integration might actually bring in more investment from the mainland. Their suggestion received support from some Chinese officials.72 While the actual political effects of their attempt remain unobservable,73 what we do observe is that, fifteen months later, the chief executive announced in his Annual Policy Address a long-term salvation plan for the economy: deep integration with the mainland economy. A few months later, the Hong Kong government further announced the signing of the Closer Economic Participation Arrangement (CEPA) with mainland China. CEPA, which is essentially a preferential trade agreement, has been heralded time and again by the real estate elite as a gift from the central government to the city.74 It has conferred some advanp. 39 tages on Hong Kong companies with respect to trade in goods and services, and investment in the mainland.75
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Figure 3. Service Exports, and and Mainland Tourists Figure 3:Manufacturing, Manufacturing, Service Exports, Mainland Tourists
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In practice, the benefits of CEPA to manufacturing and service exports to the mainland have remained doubtful. As may be seen from Figure 3, the share of manufacturing outputs has continued to fall since 2003. By 2011, it accounted for merely 1.7 percent of Hong Kong’s GDP. Service exports to the mainland also saw no dramatic change, despite CEPA. In fact, the share of service exports to the mainland dropped slightly after CEPA. One major policy component of CEPA is to relax the travel restrictions of mainlanders, which was a policy suggested in the real estate elite’s proposed joint letter to the chief executive. Prior to CEPA, mainland residents needed to join group tours when visiting Hong Kong. The Individual Visit Scheme of CEPA permits residents of certain mainland cities to visit Hong Kong on an individual basis. Since 2003, the scheme has been made available to more and more mainland cities. As may be seen from Figure 3, the number of mainland visitors as a share of the total visitors to Hong Kong has skyrocketed, reaching 71 percent in 2012. The major beneficiaries of the influx of mainland Chinese include the retail sector, the real estate sector, and nontradable services p. 40
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industries. For the retail sector, it is easy to understand how they benefit from the scheme because their sales are directly proportional to the number of shoppers.76 For the other two sectors, the benefits are less obvious, but no less substantial. Take health care services as an example. Many mainland visitors avail themselves of Hong Kong’s hospital services because they find them more reliable than those in the mainland. Also, tens of thousands of pregnant women from the mainland have tried to give birth in Hong Kong, in an attempt to gain the benefits associated with Hong Kong residency status, including the absence of the one-child policy.77 The ease of traveling has attracted mainlanders to invest in Hong Kong’s property markets. Some buy flats as vacation properties, while others do so for speculation purposes. According to one source,78 mainlanders accounted, in the third quarter of 2011, for 22.7 percent of capital and 12.55 percent of home buyers in Hong Kong. Land developers have also changed their business strategies in response to the influx of mainland investors. More luxurious apartment buildings have been built. The effect of this changing composition of residential properties and the intensified competition is reflected in housing prices.79 Many Hong Kong residents lament the decreasing affordability of private housing. Ironically, in merely one decade, the most vexing social problem confronting Hong Kong people has changed from having too many “negative equities” to having too few affordable flats.
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The policies discussed in the previous section have led to a steady increase in the aggregate demand for land since 2003. As may be seen from Figure 4, housing prices have been on a rising trend in recent years. Most notably, the prices of residential properties doubled between 2003 and 2010. An important effect of these rising land prices is an increase in the production cost of economic activities that require land as an input. This provides a partial explanation for the continuous decline of the city’s manufacturing outputs, as shown in Figure 3.80 This also highlights potential conflicts among the different economic benefits promised by CEPA. Hong Kong’s small economy cannot keep luring mainland capital to asset markets, while boosting its manufacturing sector.
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Figure 4: Some Important Socioeconomic Events and Housing Price in Hong Kong
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Note: Housing price index 1999 =100. The housing price index comes from the HKSAR Rating and Valuation Department.
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In addition, the housing boom has also raised aggregate economic risk. If the liquidity in housing markets continues unabated, another housing bubble will likely emerge. Aware of the heightened risk, the government has since 2010 levied various duties on real estate transactions to curb speculation.81 Overdependence on services industries, especially those geared toward mainland consumers, has other problems, too. First, remuneration to employees in consumer services is lower than that in producer services.82 Second, the supply of mainland consumers cannot keep increasing indefinitely. Third, as economists have long observed, it is difficult to raise productivity in service industries.83 Therefore, it remains unclear how to sustain economic growth when the number of mainland tourists eventually levels off. The rise of a land-dependent economy has significant redistribution consequences. Thanks to the inflow of mainland capital and the expansion of the service sector, landowners see the rent and value of their properties constantly on the rise. Meanwhile, booming services
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industries, especially those related to consumer services, have increased the relative demand for low-skilled workers vis-à-vis high-skilled workers. This helps explain recent developments in Hong Kong’s labor market. The first is that the unemployment rate remains low, despite the enactment of a statutory minimum wage in 2011. Figure 5 shows the number of low-skilled workers (i.e., without college degree) in different income groups. From 2006 to 2011, there was a drastic decrease in the number of those who earn less than HK$6,000. Despite rising labor costs, employment in consumer services such as the retail, accommodation, and food service sectors kept expanding, resulting in a slight decline in the city’s unemployment rate.84 In contrast, fresh college graduates’ wages in 2012 were on a par with those in 2008. In fact, if one takes a longer view, their wages in 2012 were not even able to surpass the 1997 level (see Figure 6 on Page 24).
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Figure 5.5: Number of Low-Skilled WorkersWorkers in Different Salary Groups Salary Groups Figure Number of Low-Skilled inMonthly Different Monthly
Sources: 2006 Bi-Census and 2011and Census, Census and Statistics Department of HKSAR Government. of HKSAR Sources: Bi-Census Census, Census and Statistics Department 2006 2011 Government. Note: The data exclude foreign domestic helpers. “Primary and below” refers to workers who have attained no more than primary education, while “secondary” refers to those who have attained no more than secondary
Note: The data exclude foreign domestic helpers. “Primary and below” refers to workers who education. have attained no more than primary education, while “secondary” refers to those who have attained no more than secondary education.
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Figure 6: Average Annual Salaries of College Graduates by Discipline
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Source: University Grants Committee of the HKSAR Government, 2013.
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The redistribution consequences help us understand political conflicts in post-1997 Hong Kong. The real estate elite, who are the major beneficiaries of the aforementioned economic developments, have become the target of public resentment and protests. It must be noted, however, that the benefits of the housing boom are not confined to the real estate elite. Ordinary citizens who own only personal-use properties can benefit from rising home prices, as they can refinance their mortgages to enjoy additional cash flow. The only people who cannot enjoy the direct benefits of the housing boom are those without any property. But if they happen to be lowskilled workers, they stand to benefit from the expansion of the service sector. In addition, many of these low-skilled workers would have stayed in the same public rental housing anyway, had there been no housing boom. As a result, the decreasing affordability of private properties may not concern them. A relatively less fortunate social group is that of young college graduates. On the one hand, most of them are not wealthy enough to afford the down payment to become a property owner, thereby failing to take
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advantage of the rising tide of the property market. On the other hand, their wage level disqualifies them from public rental housing. Their plight is compounded by the fact that their skill set is less valued in a labor market swamped by low-skilled service jobs. Perhaps this explains why many social movements in post-1997 Hong Kong have been led by the so-called post-80s generation (people who were born after 1980). The massive influx of mainland visitors has created another political fault line. As discussed before, the ease of travel has attracted not only mainland sightseers, but also mainland consumers. The latter group competes with locals over public services and facilities, such as health care services, as well as for consumer commodities ranging from housing to baby formula. In particular, food safety scandals in China have undermined the mainlanders’ confidence in domestic food products. Those who live near Hong Kong are willing to go all the way to Hong Kong to shop for daily food products, which they believe to be safer.85 The resilient demand for Hong Kong–made products has spawned a new business: smuggling. Thanks to the Individual Visit Scheme, many mainlanders are hired as “foot soldiers” to carry products across the border, box by box, to avoid customs duties.86 Many Hong Kong people are upset by the unprecedented competition brought on by mainland consumers. An antimainlanders sentiment has escalated. Online forums have been littered with hate-mongering terms such as “locusts” and “shina” to insult mainlanders. More people, especially the younger generations, identify themselves as Hong Kongers, rather than Chinese.87 In recent street protests, some participants even displayed Hong Kong’s colonial flag to express their nostalgia for the “good old days,” if not also to embarrass Beijing.88
7. Discussion and Conclusion Li Ka-shing is probably right in stating that the HKSAR government does not depend on any one individual. Although the chief executive is not democratically elected, his political power is constrained by various social and political forces. In this article, I have examined one seemingly powerful special interest group—the real estate elite. The concentration of economic power and political privilege in the hands of the real estate elite has fueled strong public resentment in postcolonial Hong Kong. Many mass mobilizations taking place in postcolonial Hong Kong have been directed against the real estate elite. The
26
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emergence of the “real estate hegemony” thesis and its growing popularity in public discourse attest to the widespread suspicion of these members of the elite, who have been perceived to misuse their formal political office and informal political connections with Chinese authorities to advance their special group interests at the expense of the Hong Kong public. However, as illustrated in this article, while there have been collective attempts by the real estate elite to influence government policies (e.g., pertaining to changes in the demand and supply of land), government policies at times have pitted members of the real estate elite against each other (e.g., the leasehold system and application list system). In addition, internal strife among the real estate elite has run deep, which has constrained their ability to advance their special group interests. This has contributed to delays (e.g., in the Hong Kong–Zhuhai–Macau Bridge project) or suspension (e.g., of the West Kowloon Cultural Development Project) of mega projects that would bring aggregate benefits to the real estate sector. In addition, the “real estate hegemony” thesis focuses primarily on how the real estate elite reaps benefits from government policies, ignoring the spillover effects of such policies. As this article demonstrates, the dependence on land-related economic activities has led to the expansion of services industries, increasing the aggregate demand for low-skilled workers who can also share the fruits of the land-dependent economy. An important implication of the foregoing analysis is that political conflicts in postcolonial Hong Kong do not necessarily arise from the cleavage between the real estate elite and the rest of the population, as the “real estate hegemony” thesis presumes. Because low-skilled workers also benefit from the expansion of the service sector, their dissatisfaction with the political status quo, which is biased in favor of the real estate elite, should be relatively low. In contrast, young and high-skilled workers are squeezed between rising asset prices and decreasing returns to education in the land-dependent economy, together with their lack of access to housing welfare. The distributive effects of the land-dependent economy have structured political alignment in postcolonial Hong Kong. On the one hand, we observe that younger people have become increasingly restive and receptive to political radicalism. On the other hand, pro-establishment parties have witnessed increasingly strong showings in recent elections, thanks to their rising popularity among the low-income class.
Real Estate Elite, Economic Development, and Political Conflicts
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Appendix A: Listed Hong Kong–Based Real Estate Companies Company name
Listing code
Date of incorporation
HK16
1992
Sun Hung Kai Properties Cheung Kong Holdings Hang Lung Properties
Market value (US$ millions) 293,241.40
HK1
1971
217,372.00
HK101
1908
134,756.90
HK4
1886
117,038.90 104,694.80
Wharf Holdings Henderson Ld. Dev.
HK12
1976
Sino Land
HK83
1971
72,044.50
Hang Lung Group
HK10
1960
61,067.79
HK683
1996
56,164.55
HK17
1970
54,381.65
Wheelock and Co.
HK20
1918
s
Kerry Properties New World Dev.
ter
ial
49,170.71
HK247
1972
HK127
1989
27,324.83
Hysan Development
HK14
1970
25,404.27
ted op yri gh
HK34
Polytec Asset Hdg.
HK208
Associated Intl. Hotels
HK105
ss: C
Kowloon Development
Ma
Tsim Sha Tsui Props. Chinese Estates Hdg.
33,944.82
1961
9,792.29
1998
6,392.11
1983
5,904.00
HK163
1991
5,521.05
HK1200
1993
5,294.13
HK171
1960
4,959.61
sity
Pre
Emperor Intl. Hdg. Midland Holdings
ive r
Silver Grant Intl. Inds.
1989
4,469.41
HK35
1990
4,318.24
HK432
1998
3,394.52
ese
HK88
1989
3,174.11
Vanke Property (Os.)
HK1036
1996
3,085.06
Wing Tai Properties
HK369
1952
3,069.07
Tian Teck Land
HK266
1969
3,038.28
China Motor Bus
HK26
1933
2,826.87
HK251
1989
2,680.57
Th
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Tai Cheung Holdings
hin
Pacific Cen. Prum. Devs.
HK480
Un
HKR International Far East Consort. Intl.
Sea Holdings Hong Kong Ferry Hdg. International Entm. Lai Sun Dev.
HK50
1923
2,476.10
HK1009
2000
2,405.48
HK488
1959
2,166.79
Melbourne Ents.
HK158
1967
2,000.00
Richfield Group Holdings
HK183
1993
1,786.38
Asia Standard Intl. Group
HK129
1992
1,666.90
Soundwill Holdings
HK878
1994
1,423.37
Hong Kong Chinese
HK655
1992
1,416.99
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Company name
Listing code
Date of incorporation
Hycomm Wireless
HK499
1997
YT Realty Group
HK75
1990
Market value (US$ millions) 1,397.97 1,079.40
ITC Properties Group
HK199
1994
1,045.10
Lai Sun Garment (Intl.)
HK191
1987
1,002.80
2002
962.54
HK733 HK277
1968
961.76
Asia Orient Hdg.
HK214
1991
956.75
Dan Form Holdings
HK271
1973
947.95
Rivera (Holdings)
HK281
1964
912.99
HK89
1968
894.65
1963
877.07
HK131 HK106
1990
Pokfulam Dev.
HK225
1970
Wang On Group
HK1222
Ma
ted
HK613 HK237
1993
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Yugang International Safety Godown
ter
Cheuk Nang (Holdings) Landsea Green Properties
ial
Tai Sang Land Dev.
s
Hopefluent Group Hdg. Tern Properties
858.64 754.73 697.90
1960
648.00
1993
597.03
1947
588.35
HK212 HK224
1989
492.39
HK63
1996
447.38
HK459
2001
398.40
Pre
ss: C
Nanyang Holdings Pioneer Global Group
sity
Winfoong International
Un
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Hanny Holdings
ese
Wah Ha Realty
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Midland IC & I Henry Group Holdings
1999
356.37
HK278
1961
344.74
HK275
1991
291.95
HK519
1988
218.11
HK1003
1994
187.07
Winfair Investment
HK287
1971
175.20
Paladin
HK495
1988
136.97
HK79
1993
113.11
Th
21 Holdings
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Applied Development Hdg.
HK859
Century Legend Holdings Fortune Sun (China) Hdg.
HK352
Wing Lee Property Invs.
HK864
2012
Swire Properties
HK1972
1972
Lifestyle Props. Dev.
HK2183
Capitamalls Asia (HKG)
HK6183
Kong Shum Property Man.(Hldg.)
HK8181
83.19
Source: Datastream. Notes: Real estate firms not based in Hong Kong are excluded. Market values are based on data as of July 31, 2010. For Wharf Holdings, Hang Lung Properties, Swire Properties, and Richfield Group Holdings, their foundation dates are reported.
Real Estate Elite, Economic Development, and Political Conflicts
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Appendix B: Top Ten Chinese Business Families in Hong Kong in 1997 Market value % of Hong Selection Chinese (HK$ millions) Kong stock committee people’s market political capitalization consultative conference 2 0
Cheung Kong Holdings
152,787.40
Hutchison Whampoa
206,215.80
Hong Kong Electric
54,549.01
Cheung Kong Infrastructure Holdings Total
16.01
Ma
ter
463,821.02
s
Li Ka-shing family
ial
Name
111,729.40 21,975.14 45,245.36
Hong Kong Ferry Holdings
4,791.88
Miramar Hotel and Investment
8,196.68
0
1
0
6.63
ese
Un
ive r
191,938.46
Kwok Tak-seng family
1
Pre
sity
Total
0
ss: C
Hong Kong and China Gas
2
op yri gh
Henderson Land Development Limited Henderson Investment Limited
ted
Lee ShauKee family
hin
Sun Hung Kai Properties
Th
eC
Kowloon Motor Bus
Smartone Telecommunication Holdings Total
182,799.80 999.69 7,751.99 191,551.48
6.61
Woo Kwong-ching family Wheelock and Company
33,009.10
Wharf Holdings
68,906.06
New Asia Realty
10,176.57
Harbour Centre Development
3,307.50
Cross-Harbour Holdings
3,209.93
Beauforte Investors Corporation Limited Total
386.52 118,995.68
4.11
30
Stan Hok-wui Wong
Name
Market value % of Hong Selection Chinese (HK$ millions) Kong stock committee people’s market political capitalization consultative conference 0 1
Yung Chi-kin family CITIC Pacific
82,980.88
Total
82,980.88
2.86
Cheng Yu-tung family
1 74,258.06
Total
74,258.06
2.56
ter
ial
s
New World Development
1
21,549.04
Sino Hotels Holdings
0
0
0
0
2
0
2,765.81
Total
2.05
Pre
ss: C
59,248.99
sity
Kuok Hock Nien family Kerry Properties
ive r
18,185.82
Un
Shangri-La Asia
ese
SCMP Group
14,779.38 11,684.24 44,649.44
1.54
eC
hin
Total
0
ted
34,934.14
Sino Land
1
op yri gh
TsimShaTsui Properties
Ma
Ng Teng Fong family
Th
Chan Chi-chung family Hang Lung Group
18,874.03
Hang Lung Properties
21,807.08
Total
40,681.11
1.4
Li Kwok-po family Bank of East Asia
34,706.24
Total
34,706.24
1.2
Sources: Datastream, Wong (2012). Note: Data on market value are based on a randomly selected date in April 1997.
Real Estate Elite, Economic Development, and Political Conflicts
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Notes 1.
2.
6.
11.
12. 13.
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3.
As of the end of 2013, three years after the first publication of its Chinese version, the book was in its twelfth edition. No other popular social science title has been able to achieve the same level of popularity within such a short period of time in recent years. These scandals include the former chief executive’s acceptance of gifts and services offered by some major land developers, the involvement of the former chief secretary for administration in a corruption case with a major land developer, and the appointment of the former permanent secretary for housing, planning and lands to a high-ranking position in a land development company shortly after his retirement. Ronald Rogowski, Commerce and Coalitions: How Trade Affects Domestic Political Alignments (Princeton, NJ: Princeton University Press, 1989). Peter Gourevitch, Politics in Hard Times: Comparative Responses to International Economic Crises (Ithaca, NY: Cornell University Press, 1986). Michael J. Hiscox, International Trade and Political Conflict: Commerce, Coalitions, and Mobility (Princeton, NJ: Princeton University Press, 2002). Carles Boix, Democracy and Redistribution (New York: Cambridge University Press, 2003). Thomas B. Pepinsky, Economic Crises and the Breakdown of Authoritarian Regimes: Indonesia and Malaysia in Comparative Perspective (New York: Cambridge University Press, 2009). Richard A. Posner, “Theories of Economic Regulation,” Bell Journal of Economics and Management Science, Vol. 5, No. 2 (1974), pp. 335–358; George J. Stigler, “Theories of Economic Regulation,” Bell Journal of Economics and Management Science, Vol. 2, No. 1 (1971), pp. 3–21. Mara Faccio, “Politically Connected Firms,” American Economic Review, Vol. 96, No. 1 (2006), pp. 369–386. Joseph P. H. Fan, T. J. Wong, and Tianyu Zhang, “Politically Connected CEOs, Corporate Governance, and Post-IPO Performance of China’s Newly Partially Privatized Firms,” Journal of Financial Economics, Vol. 84 (2007), pp. 330–357. Thomas Ferguson and Hans-Joachim Voth, “Betting on Hitler—The Value of Political Connections in Nazi Germany,” Quarterly Journal of Economics, Vol. 123, No. 1 (2008), pp. 101–137. Hong Kong Monetary Authority, “Domestic and External Environment,” Hong Kong Monetary Authority Quarterly Bulletin (2013), pp. 1–5. Ashvin Ahuja, Lillian Cheung, Gaofeng Han, Nathan Porter, and Wenlang Zhang, “Are House Prices Rising Too Fast in China?,” IMF Working Paper (2010), p. 274. Article 7 of the Basic Law, the mini-constitution for the city, stipulates that “[t]he land and natural resources within the Hong Kong Special Administrative Region shall be State property.”
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15. Hong Kong Monetary Authority, “Half-yearly Monetary and Financial Stability Report” (2012). 16. Anne Haila, “Real Estate in Global Cities: Singapore and Hong Kong as Property States,” Urban Studies, Vol. 37, No. 12 (2000), pp. 2241–2256. 17. Eliza W. Y. Lee, “The Renegotiation of the Social Pact in Hong Kong: Economic Globalisation, Socio-economic Change, and Local Politics,” Journal of Social Policy, Vol. 34, No. 2 (2005), p. 297. 18. Jean Imbs and Romain Wacziarg, “Stages of Diversification,” American Economic Review, Vol. 93, No. 1 (2003), pp. 63–86. 19. As of 2012, the per capita GDP of Washington, D.C., was US$71,536, while that of Hong Kong was US$48,672. See Brookings Institution, “Global Metro Monitor” (2013), http://www.brookings.edu/research/interactives/ global-metro-monitor-3. 20. This is not to suggest that land costs are the sole reason for Hong Kong’s insignificant manufacturing development. Other factors, including high labor costs, also have contributed to this. 21. A. J. Youngson, Hong Kong: Economic Growth and Policy (Hong Kong: Oxford University Press, 1982); Peter K. W. Wong and Anthony G. O. Yeh, “Hong Kong,” in Housing Policy and Practice in Asia, edited by Seong-kyu Ha (London: Croom Helm, 1987); Jonathan R. Schiffer, “State Policy and Economic Growth: A Note on the Hong Kong Model,” International Journal of Urban and Regional Research, Vol. 15, No. 2 (1991), pp. 180–196. For instance, by the late 1980s, more than 45 percent of the population lived in heavily subsidized public housing. 22. Leo F. Goodstadt, A Fragile Prosperity: Government Policy and the Management of Hong Kong’s Economic and Social Development (Hong Kong: Hong Kong Institute for Monetary Research, 2009). He observes that laissez-faire is merely a euphemism for the colonial government’s probusiness bias and lack of a long-term commitment to social development. 23. Manuel Castells, Lee Goh, and R. Yin-wang Kwok, The Shek Kip Mei Syndrome—Economic Development and Public Housing in Hong Kong and Singapore (London: Pion, 1990); Schiffer, “State Policy and Economic Growth.” 24. Like many local governments in China, the Hong Kong government faces a hard budget constraint. But unlike its mainland counterparts, the Hong Kong government does not need to hand over any tax revenue to the central government, a special arrangement provided by the Basic Law. Nor can the central government levy taxes in the special administrative region. These constitutional provisions should put the Hong Kong government in a better position to maintain a balanced budget than most local Chinese governments, which may need to rely on land sales to cover their expenditures. See Tianyong Zhou, “Maidi caizheng de weihai jigai cuoshi” (The Hazards
Real Estate Elite, Economic Development, and Political Conflicts
25.
of Land Sale Finance and Its Remedies), Dangdai sheke shiye (Modern Social Science View), Vol. 3 (2008), p. 54; Chong-fu Li, “Guanyu jiejue dachengshi fangjiagao de jibensilu” (On How to Curb the Exorbitant Housing Prices in Some Big Cities), Zhongguo liutong jingji (China Business and Market), Vol. 4 (2011), pp. 4–7. Stan Hok-wui Wong, “Political Connections and Firm Performance: The Case of Hong Kong,” Journal of East Asian Studies, Vol. 10, No. 2 (2010), pp. 275–313; Ma Ngok, “Eclectic Corporatism and State Interventions in Post-colonial Hong Kong,” in Repositioning the Hong Kong Government: Social Foundations and Political Challenges, edited by Stephen Wing-kai Chiu and Siu-lin Wong (Hong Kong: Hong Kong University Press, 2012). Joseph Y. S. Cheng, “Hong Kong's Democrats Stumble,” Journal of Democracy, Vol. 16, No. 1 (2005), p. 143; Ian Scott, “Legitimacy, Governance and Public Policy in Post-Handover Hong Kong,” Asia Pacific Journal of Public Administration, Vol. 29, No. 1 (2007), p. 33. Ma, “Eclectic Corporatism and State Interventions,” pp. 71. Wong, “Political Connections and Firm Performance.” Wing-chung Ho, Lung-wan Lee, Chun-man Chan, Yat-nam Ng, and Yee-hung Choy, “Hong Kong’s Elite Structure, Legislature and Bleak Future of Democracy under Chinese Sovereignty,” Journal of Contemporary Asia, Vol. 40, No. 3 (2010), pp. 466–486. Tai-lok Lui and Stephen Wing-kai Chiu, “Governance Crisis in Post-1997 Hong Kong: A Political Economy Perspective,” China Review, Vol. 7, No. 2 (2007), pp. 1–34. Brian C. H. Fong, “State-Society Conflicts under Hong Kong’s Hybrid Regime: Governing Coalition Building and Civil Society Challenges,” Asian Survey, Vol. 53, No. 5 (2013), pp. 854–882. Alice Poon, Land and the Ruling Class in Hong Kong (Singapore: Enrich Professional Publishing, 2011). In one public opinion survey conducted by the Chinese University of Hong Kong, 85 percent of respondents had heard of the “real estate hegemony” thesis, and 66 percent believed the “hegemony” existed in Hong Kong. See The Chinese University of Hong Kong, “Survey on Public Opinion about ‘Real Estate Hegemony’” (2011), http://www. cuhk.edu.hk/hkiaps/tellab/pdf/telepress/11/Press_Release20110810.pdf. Steve Tsang, A Modern History of Hong Kong (Lanham, MD: Rowman & Littlefield, 2004), pp. 218–225; John M. Carroll, A Concise History of Hong Kong (Lanham, MD: Rowman & Littlefield, 2007), pp. 167–189. Ronald Skeldon, Population Mobility in Developing Countries: A Reinterpretation (London: Belhaven Press, 1990), p. 501. Stan Hok-wui Wong, “Authoritarian Co-optation in the Age of Globalisation: Evidence from Hong Kong,” Journal of Contemporary Asia, Vol. 42, No. 2 (2012), pp. 182–209.
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36. Alvin Y. So, “Hong Kong’s Problematic Democratic Transition: Power Dependence or Business Hegemony?,” Journal for Asian Studies, Vol. 59 (2000), pp. 359–381; Ming Sing, “Democratization and Economic Development: The Anomalous Case of Hong Kong,” Democratization, Vol. 3, No. 3 (1996), pp. 343–359. 37. So, “Hong Kong’s Problematic Democratic Transition,” pp. 369. 38. Bangyan Feng, Xianggang huazi caituan: 1841–1997 (Hong Kong Chinese Consortiums) (Hong Kong: Joint Publishing, 1997). 39. In addition to political power, Beijing may well have rewarded Hong Kong’s landed elite with side payments. Wong finds evidence that listed firms connected to the Selection Committee showed better performance over politically unconnected firms. See Wong, “Political Connections and Firm Performance.” 40. Feng, Xianggang huazi caituan. 41. Roger Nissim, Land Administration and Practice in Hong Kong (Hong Kong: Hong Kong University Press, 2012). 42. The other major mechanism was public tenders. 43. “Ji Xianggang dichanshang yige jinghao” (A Warning to Hong Kong Property Developers), Hong Kong Daily News, June 9, 2013. 44. “Guanshang goudi fenqi honggou rengkuo” (Huge Differences between Government and Businessmen on the Application List), Hong Kong Economic Times, March 1, 2006. 45. During the entire lifetime of the application list system, only 58 sites were successfully sold (see Table 2), which implies, on average, four sites sold annually. 46. I do not claim that these examples are necessarily representative of the competition of the real estate elite. But these high-profile cases are economically significant and iconic examples of the perceived “collusion between government and business.” Using them to illustrate internal strife among the real estate elite is instructive. 47. Bob Jessop and Ngai-ling Sum, “An Entrepreneurial City in Action: Hong Kong’s Emerging Strategies in and for (Inter)urban Competition,” Urban Studies, Vol. 27, No. 12 (2000), pp. 2287–2313. 48. “Yingke wuzui mingyi youli” (PCCW Is Not Guilty, Collusion Is Reasonable), Hong Kong Daily News, March 17, 1999; “Guanshang goujie guafen Xianggang” (Government-Business Collusion Partitions Hong Kong), Ming Pao News, September 20, 1999. 49. “Shumagang zhuzhaiwurebufen mogongkai jingtou gangfu beizhi mingyi yingli 35yi” (Government Does Not Disclose Real Estate Development in the Cyberport Project), Apple Daily, March 16, 1999; “Shumagang dichan fazhan guimodai ‘mijian’ zhizheng fuke yiyinman” (Censored Document States Government Concealed Large-Scale Real Estate Development in Cyberport), Ming Pao News, March 16, 1999.
Real Estate Elite, Economic Development, and Political Conflicts
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50. “Shumagang ni banniannei qianyue kuangqizhi cheng weiyou piantan yingke ganmingnian donggong buzhaobiao” (Cyberport Contract Will Be Signed within Six Months, Kwong Said No Favoritism to PCCW, Construction Work Will Begin Next Year without Tendering), Hong Kong Commercial Daily, March 17, 1999. 51. “Government Does Not Disclose Real Estate Development,” Apple Daily, March 16, 1999. 52. “Shumagang qi ronglu xiaoying” (Cyberport Creates Furnace Effect), Sing Tao Daily, December 30, 1999. 53. Ibid. 54. Juanito Concepcion and Michelle Lee, “Government Wins Anti-Cyberport Developers over with Pledge,” Standard, May 6, 1999. 55. Chee-hwa Tung, The 1998 Policy Address (Hong Kong: Printing Department, 1998). 56. Tai-lok Lui, “City-Branding without Content: Hong Kong’s Aborted West Kowloon Mega-Project, 1998–2006,” International Development Planning Review, Vol. 30, No. 3 (2008), pp. 215–226. 57. “He Hongshen: gengduo shangren canyu xijiu” (Stanley Ho: More Businessmen Participate in the West Kowloon Project), Apple Daily, July 21, 2005. 58. “Xijiu fazhan che danyi moshi” (Single-Consortium Development Mode of West Kowloon Development Is Dropped), Oriental Daily News, October 5, 2005. 59. “Zeng Yinquan wei lelianren tuidao xijiu” (David Tsang Suspended West Kowloon Development to Boost Re-election), Apple Daily, February 22, 2006. 60. Rosemary Sayer, The Man Who Turned the Lights On: Gordon Wu (Hong Kong: Chameleon Press, 2006), pp. 186–196. 61. “Huohuang fandui jianqiao huobutie” (Hutchison Whampoa Opposes Subsidizing Bridge Construction), Sing Pao Daily News, August 28, 2002. 62. “Huoliu buzu wuxu jianqiao fandui zhengfu tigong butie huohuang yujian neidi-kuiyongmatou tielu” (Hutchison Whampoa Argues Bridge Construction Is Not Necessary Due to Insufficient Cargo Flow, Urges to Build Railway between Kwai Tsing Container Terminals and the Mainland), Hong Kong Commercial Daily, August 30, 2002. 63. “Gangzhuao daqiao qiang jinkuai xingjian Zhuzong mingling lishun guanka jise jijianli gengjinmi jingmao guanxi” (Premier Zhu Pressed for the Construction of Hong Kong–Zhuhai–Macao Bridge to Build Closer Economic Relations), Wen Wei Po, November 22, 2002. 64. “Lizeju kaiqiang: xuanteshou buneng zhikan shuyue shoufu jiazu tingtang lichang weibian” (Victor Li States Choosing New Leaders Should Not Be Shortsighted. The Richest Family Continues to Support Tang), Apple Daily,
36
65.
66.
March 5, 2012; “Tang duoge jiebie weihuo timingpiao” (Tang Does Not Receive Nomination from Many Sectors), Hong Kong Daily News, February 22, 2012; “Dichan zhengshang tingtang piaocang quezoupiao” (Most Real Estate Entrepreneurs Support Tang, though Tang Has Lost Some Support), Hong Kong Economic Times, February 22, 2012. “Kongke xuanwei shouwo heicailiao bipo toupiao yixing nibaojing” (Some Electors Are Blackmailed, and Plan to Report to the Police), Hong Kong Economic Journal, March 7, 2012. Joseph Lian Yi-zheng, “Tangliang zhengba gaohezong lianhuan, meiti weiguanjing nahan taijiao” (Media Join in Shenanigans of Tang–Leung Struggles), Hong Kong Economic Journal, February 1, 2012. K. Y. Lau, “The State-Managed Housing System in Hong Kong,” in Housing and the New Welfare State, edited by Richard Groves, Alan Murie, and Christopher Watson (Aldershot, England: Ashgate, 2007), pp. 12–47. Ibid.; “Guobingjiang: loushi zhongchangqi rengxianghao” (Thomas Kwok: Real Estate Market Will Be Better in the Medium and Long Runs), Wen Wei Po, May 26, 1998; “Lijiacheng youguan loushi di yanlun” (Li Ka-shing’s Comments on the Real Estate Market), Sun, May 25, 2001. Owing to the unavailability of data, the total figures after 2002 exclude village houses, which make up a small portion of total flat production. For instance, about three thousand village houses were built in 2006. “Qianglianming zhihan teshou jiakuai beishuinanliu Wuda Shanghui cu ershisixiaoshi tongguan” (Five Business Associations Urged the Chief Executive to Promote Integration and Extend Border-Crossing to 24 Hours), Sing Tao Daily, October 23, 2001. “Quanri tongguan jindu xu jizao yanjiu” (24-Hour Customs Clearance Research Should Begin as Soon as Possible), Ming Pao News, October 25, 2001. “Zhongyang zhichi gang tuokun” (The Central Government Supports Hong Kong to Recover from Economic Recession), Takungpao, December 5, 2001. What may have hindered the effectiveness of their attempt was again a lack of consensus. Major developers failed to agree on an important detail of mainland–Hong Kong integration: twenty-four-hour border control points. In particular, Stanley Ho opposed this idea. See “Dichanshanghui dui tongguan cun feiqi” (Real Estate Developers Association of Hong Kong Is Divided over Extending Border-Crossing to 24 Hours), Sing Tao Daily, November 1, 2001. “Zhongyang songlishi huadiao” (Chinese Gifts Are Yellow Wines), Hong Kong Economic Times, August 8, 2003; “Zhongyang zaisong daili jinghuzhen geren xiangangyou” (Chinese Government Sends Gift Again. Individual Visit Scheme Expands to Beijing and Shanghai), Ming Pao News,
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74.
Real Estate Elite, Economic Development, and Political Conflicts
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July 26, 2003; “Zhongyang songdaili gonggu jinrong zhongxin diwei gangyinhang keyouxian jingying renminbi” (Chinese Government Further Stabilizes Hong Kong as Financial Center by Allowing Hong Kong Banks to Operate Renminbi Services), Sing Tao Daily, July 26, 2003. Peter Y. W. Chiu, “CEPA: A Milestone in the Economic Integration between Hong Kong and Mainland China,” Journal of Contemporary China, Vol. 15, No. 47 (2006), pp. 275–295. Only two months after the implementation of the Individual Visit Scheme, Peter Woo, the chairman of Wheelock and Company, announced that his shopping arcades saw a 20 to 30 percent increase in traffic. See “Jiucang: shangchang renliu sheng puzu liaoshangtiao Wuguangzheng kanhao ziyouhang touzi wuye ni zhudichanjijin” (The Wharf: Increasing Visitor Numbers in Shopping Malls. Peter Woo Is Optimistic about Mainland Visitors Buying Apartments in Hong Kong, and Intends to Inject More Money into the Real Estate Fund), Takungpao, August 22, 2003. The influx of mainland pregnant women had exhausted the obstetric services provided by many Hong Kong hospitals, fueling resentment among local residents. In 2012, the Hong Kong government bowed to public pressure and announced that children born in Hong Kong cannot obtain permanent residency if their parents are not Hong Kong residents. Centaline Research Department of Hong Kong, “Graph Illustration of the Trend of Mainland Buyers and Sellers of Hong Kong Properties” (2013). As of June 2013, the average price of residential properties has surpassed even the peak of 1997 by 40 percent. See “Loujiegao 97 sicheng lazhao buche” (Property Price Is 40 Percent Higher Than 1997: Tough Measures Will Not Be Abandoned), Takungpao, August 17, 2013. Yu and Thun provide a more detailed discussion of the relationship between land prices and production costs in the context of Hong Kong. See Tony Fu-lai Yu, Entrepreneurship and Economic Development in Hong Kong (London: Routledge, 1997), p. 141; Eric Thun, “Manufacturing for a PostManufacturing City,” in Innovation Policy and the Limits of Laissez-faire: Hong Kong’s Policy in Comparative Perspective, edited by Douglas B. Fuller (Basingstoke: Palgrave Macmillan, 2010), pp. 198–220. Nevertheless, from the perspective of the capital-rich real estate elite, the heightened risk is not necessarily a bad thing because, as previously mentioned, many of them have benefited from the boom–bust cycles of the real estate sector. Ronnie Chan, chairman of Hang Lung Properties, even indicated that he loves a housing downturn, as it is the best time to accumulate land at a low cost. See “Chen Qizong: wuyi jianjia maihuoyi” (Ronnie Chan: No Plan to Cut Prices to Sell Remaining Flats), Wen Wei Po, August 1, 2013. I thank an anonymous reviewer for pointing this out.
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83. William J. Baumol, “Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis,” American Economic Review, Vol. 57, No. 3 (1967), pp. 415–426. 84. The unemployment rate of 2011 was 3.4 percent, while that of 2012 was only 3.3 percent. 85. The appreciation of renminbi has also increased mainland consumers’ purchasing power in Hong Kong, the currency of which is pegged to the U.S. dollar. 86. Ramy Inocencio, “Daily Stampede of Chinese ‘Grey Traders’ Angers Hong Kong,” CNN, September 8, 2012; “Daji shuihuoke yuedi qiangshengji yirisanhang rujinglianghongdeng” (Anti-smuggler Campaign Will Heighten at the End of the Month: Red Lights Will Be Shown if Anyone Passes the Border Three Times a Day), Apple Daily, July 15, 2013. According to one local newspaper citing data from the Chinese government, 95 percent of tourists with multiple-entry permits are smugglers, while only 5 percent of tourists with single-entry permits are. See “Anti-Smuggler Campaign,” Apple Daily, July 15, 2013. 87. Public Opinion Programme, University of Hong Kong, “Graph Illustration: The Trend of Categorical Ethnic Identity (Per Poll)” (June 13, 2013). 88. “Zhongyang buman gangyingqi piaoyang” (Chinese Central Government Is Unhappy about the Display of Hong Kong Colonial Flag), Sharp Daily, January 15, 2013; “Chen Yongqi: wulongshiqi bumingzhi” (Chen Yongqi: It Is Unwise to Wave the Lion Flag), Sing Tao Daily, March 8, 2013.
History of Contemporary Chinese Political Movements,1949– 中 國 當代政治運動史數據庫系列
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N E W P U B L I C AT I O N S Th e C h in ese Un iver si ty P r ess The Lost Generation: The Rustication of China’s Educated Youth (1968–1980) Michel Bonnin．Translated by Krystyna Horko
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comprehensive, distinctive exploration of the rustication movement in China, which had left indelible marks in a generation and the modern Chinese history as a whole. The book provides a comprehensive account of the critical movement during which seventeen million young “educated” city-dwellers were supposed to transform themselves into peasants, potentially for life. Bonnin closely examines the Chinese leadership’s motivations and the methods that they used over time to implement their objectives, as well as the everyday lives of those young people in the countryside, their difficulties, their doubts, their resistance and, ultimately, their revolt.
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失落的一代：中國的上山下鄉運動 (1968-1980)
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2008 · 518 pp · Paperback 978-962-996-391-0 · US$25
The Metamorphosis of Tianxian pei: Local Opera under the Revolution (1949–1956) Wilt L. Idema
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January 2015 · 354 pp · Hardcover 978-962-996-593-8 · US$52
hrough the case of Tianxian pei 天仙配 (Married to a Heavenly Immortal), Idema illustrates the complicated process of rewriting and revising the play/movie in the context of a rapidly changing cultural and ideological climate during the 1950s Communist theater reform movement in China. This volume features a full translation of the original play and its revision in the 1950s, as well as selected articles by scriptwriters, directors, performers, and critics. These primary sources allow readers to gain access to inside views of the contemporaries and their political and artistic concerns.
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The China Review welcomes the submission of high-quality research articles, research notes and book reviews dealing with the political, economic, social, and historical aspects of modern and contemporary China. Manuscripts submitted for publication must comply with the following guidelines: Submission: Articles to be considered for publication should be sent in electronic format with an abstract (150 –200 words) printed on a separate page. If an electronic copy cannot be sent for review, three hard copies alone may be sent with the author’s name omitted for the purpose of anonymity (though an electronic copy will be necessary if the article is approved for publication). Research articles and articles for the Stateof-field Review column should not be longer than 10,000 words (including endnotes). Research notes should normally be approximately 3,000 words (including endnotes), and book reviews between 800 and 1,000 words. The text should be typed in 12-point Times New Roman font on A4 paper, and doubled-spaced. Manuscripts will be reviewd by external readers. Copyright: The journal does not accept manuscripts that have already been published or are being considered for publication elsewhere. Upon publication, all rights are owned by the journal. Romanization: The romanization of Chinese words in the journal follows the pinyin form, except for names (or other proper nouns) which are commonly written in other forms (e.g. place-names long familiar in the Western world, names listed in Webster’s New Geographical Dictionary, etc.). Chinese Characters: For all Chinese terms and names (except extremely well-known terms/names such as Mao Zedong), the corresponding Chinese characters should be included in the first occurrence of the term (for both the text and tables/charts, though not in the notes). Diacritical or tonal marks are not necessary when using pinyin or other romanized forms of Chinese. Pinyin should be capitalized for proper names of people and places, and the first word of a title in pinyin should be capitalized. Pinyin spacing should attempt to balance ideological coherence and readability, e.g. 國際關係 guoji guanxi, 點石齋畫報 dianshizhai huabao, etc.
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Tables and Figures: All tables and figures should be clearly numbered and typed separately at the end of the chapter with an indication in the text where it should be placed such as “Table 1 placed here.” The size and font of such tables should take into account the journal’s physical dimensions of 14 x 21 cm. Notes: All notes should appear at the end of the text of the article on a separate sheet of paper labeled “Notes.” Within the text, only a sequential superscript number should be indicated at the proper place. Other common practices, such as putting a name, date, page (e.g. Cheng, 1998: 121) in the text and reference list at the end of the chapter is not acceptable. For multiple references to a single work within the notes, a shortened form of the title may be included to save space (e.g. Fox Volant of the Snowy Mountain may be shortened to Fox Volant). Names should be consistent with the style in which it appeared on the original publication. Western style should normally be applied for all names (given name then surname); for persons with both Chinese and English given names the order should be Western given name, Chinese given name then surname. However, names should be written in the Chinese style (surname then given name) if the article quoted is published in Chinese. Note references to interviews should include the names of interviewer and interviewee, location of the interview, and the day, month, and year. Spelling: Spelling should generally follow Webster’s New World Dictionary (primarily American-style spelling). Numbers: Numbers from one to ten should be spelled out. Numbers from eleven onward should be written in number (i.e. 11) form. When writing percentages the term “percent” should be written out in the text, but the symbol “%” may be used in notes. Page references should be written as follows: p. 21, pp. 123 –132. Dates should be as 1 January 2000, 11 February 2005, etc. Below are some examples for endnotes: Victor Nee, “A Theory of Market Transition: From Redistribution to Markets in State Socialism,” American Sociological Review, Vol. 54, No. 4 (1989), pp. 663–681. An Yuanchao, “Woguo gongren jieji duiwu jiazhi guannian bianhua de diaocha” (An Investigation of Value Changes of Working Class People in Our Country), Dangdai sichao (Contemporary Thoughts), No. 2 (1997), p. 37.
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All books for review should be sent to:
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All submissions for publication should be sent to:
[email protected]
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Yunxiang Yan, The Flow of Gifts (Stanford: Stanford University Press, 1996), pp. 55–57. Chong Chor Lau, “The Chinese Family and Gender Roles in Transition,” in China Review 1993, edited by Joseph Yu-shek Cheng and Maurice Brosseau (Hong Kong: The Chinese University Press, 1993), p. 201. Biographical Note: Each contributor is requested to provide a short biographical note (research interests, current post, major publications, etc.) of 50 to 60 words.
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The China Review The Chinese University Press The Chinese University of Hong Kong Shatin, New Territories Hong Kong
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Fax: (852) 2603 7355
Call for State-of-the-field Reviews on Sinophone Scholarship
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Edited in Hong Kong and published in English, The China Review has always taken seriously its mission to serve as a bridge between Anglophone and Sinophone Chinese studies. To this end, we proudly announce a special section of The China Review, dedicated to publishing state-of-the-field reviews on Sinophone scholarship. Here, “Sinophone scholarship” is broadly defined, and used to include all kinds of academic production published in Chinese language by scholars from the Mainland, Hong Kong, Taiwan, and beyond. Over the last decade, with tens of thousands, if not hundreds of thousands, of new research works being published annually, both the quantity and quality of present-day Sinophone scholarship have markedly improved. As “insiders,” Chinese scholars may be able to bring valuable new perspectives to bear on topics that many outside of the Sinosphere would appreciate. This is especially important for exposing and understanding the fierce debates over issues these academics deem most important. However, despite the large and expanding body of academic work published in Chinese, more often than not, only those works with particular appeal to Western areas of interest are valorized, whereas the rest remain largely unexamined or even neglected. To be sure, with more and more scholars interacting with both the Anglophone and Sinophone worlds, some effort has been made to cross the boundary between those two realms of scholarship, but much more needs to be done. By regularly publishing state-of-the-field reviews on Sinophone scholarship, The China Review aims not only at increasing visibility of the vibrant academic research conducted by Chinese scholars, but also at spurring discussion about how such scholarship should be incorporated in the humanities and social sciences in the West. To achieve this goal, the editors of The China Review invite scholars at the forefront of China Studies to survey and synthesize Sinophone research literature in their respective areas of interest, whether in economics, arts, geography, literature, history, law, philosophy, political science, sociology, communications, public administration, or any other of the established academic fields. Ideally, the body of research under review should be substantive enough to warrant a review, yet not too
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bulky to render a concise and revealing review exceedingly ambitious. For instance, the first article published in this issue is a focused exploration of the intergovernmental fiscal transfer system in China. In preparing their papers, authors are advised to bear in mind that a strong review should first clearly define and delineate the topic of the review and explain why a survey of the state in the area is needed. Authors may also want to keep in mind several important questions: Why have certain issues attracted much of scholars’ attention over the past years? Is it possible to discern different intellectual and methodological approaches? What important advancements have been made? Are there any links (or tensions) between the work of Western scholars and Chinese scholars? What unresolved or latent issues deserve scholars’ additional attention in the future? Moreover, a good review should identify major gaps in our knowledge and point to the most promising lines of inquiry for addressing those gaps. Ultimately, a good review will be one that offers both a succinct retrospective overview and an intriguing preview of imminent challenges. Reviews submitted for this unique and exciting initiative may be up to 10,000 words in length. Submissions should conform to the journal’s guidelines for contributors, and will be subject to regular double-blind peer review. If you are interested in contributing a review to The China Review, please contact the Editorial Board at
[email protected].
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